New Console Sales Will Fall Short, Predicts Analyst

For a few years now, the video game industry has been in decline. The prevailing opinion has been that the current consoles have begun to stagnate, with consumers eager for new consoles and fewer sequels. Now, with the release of Sony’s and Microsoft’s next-gen consoles just weeks away, one market research firm has predicted that these new devices will not prove as popular as their predecessors.

Strategy Analytics today released a report predicting that console sales in the upcoming generation will fail to match those seen over the past 8 years. The firm predicts a 15% year-over-year decrease in console sales in 2013, down to just 28 million. This is taking into account predicted sales of the PlayStation 4 and Xbox One.

The firm is basing its prediction on this year’s failure of the Wii U, which it blames on a lack of popular games. Though the PS4 and Xbox One are expected to outsell the Wii U, Strategy Analytics expects the game console market to peak in 2016. Console sales that year are expected to reach just two-thirds of the previous generation’s 2008 peak.

The cause of the predicted decline in sales is being pinned on the ease of mobile gaming. Nintendo’s Wii and Microsoft’s Kinect device may have brought in casual gamers in the previous generation, but those same gamers are now expected to stick with less expensive experiences on tablets and smartphones.

“While Wii U, Xbox One, and PS4 hold the promise and technological prowess to transform gaming in the living room, this may only benefit core gamers,” said David Watkins, director of the Connected Home Devices at Strategy Analytics. “Casual gamers are sufficiently happy with cheaper gaming options on more ubiquitous devices like smartphones, tablets, Smart TVs, and Digital Media Adapters, which will naturally depress the highs the industry achieved with the Nintendo Wii.”

Strategy Analytics also weighed in on the coming console wars, backing up other predictions that the PlayStation 4 is on-track for a better launch. It cites Microsoft’s “unforced PR errors with the gaming community” as the cause of this, though the firm also thinks that the Xbox One’s broad strategy could end up evening the field over time.

“In the long run, however, we expect Xbox One to make up some lost ground against PS4 as consumers begin to realize the full range of multimedia capabilities the device has to offer,” said Eric Smith, analyst at Strategy Analytics. “While we expect Xbox One to outperform PS4 in the US market, we don’t anticipate a significant loyalty shift away from PlayStation in Japan and Europe.”